Not News, But History - A New Look at Medicaid Expansion

                لمشاهدة الفيديو كامل HD 
              والتحميل مجانا

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Now that 2014 and Obamacare are both here, there will be plenty of stories about Affordable Care Act implementation.  Some will be newsworthy; but others will just be history. 

Last week, we got our first history story characterized as exploding news.

The Washington Post reported on a newly-released Harvard study that analyzed the impact of the 2008 Oregon Medicaid expansion on hospital emergency department visits.  The study found that there was a 40 percent increase in the number of emergency department visits made by the new Medicaid enrollees.

For the Post article, an MIT health economist (I guess no Harvard ones were available!) commented  that he viewed it “as part of a broader set of evidence that covering people with health insurance doesn’t save money,” something he went on to characterize as a “misleading motivator for the Affordable Care Act.”

And Forbes went farther, claiming the study results are “undermining [the] central rationale” for ACA.

But the Oregon expansion increase wasn’t really news by itself, and it tells us nothing about the Affordable Care Act, either.

There are three reasons for this.

The first reason is that Medicaid recipients, as a group, have always been the most frequent users of emergency department care. 

I learned about this up close when I was involved in a community health project in Austin, TX, more than a decade ago. 

We compared the use of emergency departments for non-emergent reasons by privately insured, Medicaid-insured, and uninsured residents.  About half the visits made by privately insured or uninsured people were for non-emergent reasons.  But 60 percent of those made by Medicaid recipients were for non-emergencies. 

The same thing was true when that analysis was repeated in other hospitals in other parts of the country.

So the new study simply confirms what we have known to be the case for years.  Medicaid recipients use hospital emergency departments for non-emergent care more frequently than those who are not on Medicaid.

The second reason is that we also know why Medicaid recipients have historically gone to emergency departments for their non-emergency care. 

It isn’t that emergency rooms are more conveniently located than private doctors and walk-in clinics.  Or that some hospitals now use billboards, texting, or other mass media to advertise shorter emergency department waiting times.

It is simply because – unlike many private primary care providers – hospitals have historically been paid enough to take part in the Medicaid system. 

But there are new realities under the Affordable Care Act.  More federally-qualified health centers are being approved, and other private primary care providers are seeing increased rates – rates comparable to Medicare – for treating Medicaid patients.

While change won’t happen overnight, this means that over time more private providers will be signing up for Medicaid in the expanded Medicaid program, and more Medicaid patients will be choosing them over hospital emergency departments because they can.

And that makes the results of an expansion program that took place six years ago an interesting history lesson, but as poor a predictor of what will happen in the future under a different set of rules as historical stock market performance is of future returns.

The third reason is that cost-savings was not a “misleading motivator” for supporting the Affordable Care Act.

Despite the suggestion of the MIT economist and the Forbes headliner, it wasn’t actually a reason at all.  When the Act was debated in 2009 and 2010, it was clear to all that it was essentially cost-neutral. 

Both the CBO and the Administration projected that we were going to be spending about the same amount on health care overall for the next ten years whether or not we passed the law.  But the law would distribute the costs and savings differently.

Medicare and Medicaid would take on a slightly greater share of costs.  Out-of-pocket costs not covered by public or private insurance would go down (especially for those with chronic diseases and conditions who could not afford insurance in the past).  And private insurance would continue to pay just about one-third of the nation’s health care bill.

While not everyone in the media may have known this at the time, all the people voting on the law did.

That’s not news.  That’s history.

Just like the new Harvard study.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

The Climate Change in Insurance Exchanges

A different kind of climate change was in the news this week, as Gallup reported that the percentage of people who are uninsured declined rapidly from 17.1 percent to 15.9 percent in just three months.

That is a pretty substantial drop, and one that began when people started signing up for Obamacare.

According to Gallup and others, it translates into an additional 3 million people who now have health insurance, consistent with the numbers of people signing up for Affordable Care Act coverage.

That’s good news for Obamacare – perhaps. 

One of the more interesting – and sometimes frustrating – things about health policy is that like climate change it unfolds slowly over time, and so it is often difficult to see the change in climate while it is happening.

For one thing, there are always other variables.  For example, the unemployment rate has also gone down during this period, from 7.2 percent last October to 6.7 percent today. It is possible that some of these 3 million newly-insured people obtained insurance through employment, and would have gotten it anyway.

And there’s always the glass-half-empty view to consider.  Both the unemployment rate and the uninsured rate are just about back to where they were in 2008, right around the time that the economy was collapsing.  So most of the progress we’ve made so far amounts to dragging ourselves out of a deep hole.  We’re still just back to where we were before we fell in.

But if we look too closely at this, we miss the bigger picture.

In spite of all of the initial problems with Obamacare exchanges, and despite the unpopularity of the Act itself (54 percent still disapprove of the law, according to the Real Clear Politics average of recent polls), and despite those who believe that they may have lost their insurance because of Obamacare, the trend today is clearly in one direction.

More people are becoming insured.  And that means something in the long run. 

For one thing, it means that health and mental health providers who have been holding out from participating in insurance plans until they are sure that there will be patients there will need to start signing up.  There will be patients there, and they will be looking for providers who accept their insurance.

For another, it means that individuals who can afford insurance but have been choosing not to buy it – betting that the law will go away before they ever have to pay a penalty – are probably not going to win that bet.  As more people pay up to become insured, there will be increasing pressure on everyone else to pay their fair share, too.  Insurance is becoming more of an individual's responsibility.

People may not like their health insurance very much, but once they have it, they never want to lose it again.

So in all probability the fates of the Affordable Care Act and private health insurance are intertwined now and for the foreseeable future.  The structure of our health insurance system is changing before our eyes because of the Affordable Care Act.  But it isn’t going to undermine the idea of insurance – just the way we pay for it. 

Here is a parallel example to explain what I mean.  When IRAs were created, they were like today’s exchanges.  They were a small thing.  Defined benefit plans – or pensions – were the norm for employees (as employer-based insurance is still the norm today).  But IRAs, 401(k)s, and other tax-deferred savings offered a retirement savings option that took a savings burden off of employers and transferred it to workers.   This changed – in a single generation – the nature of how we will pay for our retirement years. 

The same thing could be happening now with health insurance.  The exchanges may seem like a small and controversial thing today – perhaps 5 million or so will be insured through them at the end of the 2014 sign-up period.  But this number is growing every day, and will grow a great deal more in the future. 

And as a result new small employers – the creators of so many new jobs in our society – may increasingly decide not to offer health insurance as workers find deals that are just as good on the open exchange markets. 

Shifting from employer-based insurance to individual insurance does reflect a change in climate.  As we argue over the details, who really knows how significant this change will be?

We've Grown Accustomed to Disgrace

It sometimes seems like policymakers go out of their way these days to pick on people with mental illness.

According to a report released last week by the American Mental Health Counselors Association, 3.7 million people with mental illness will remain uninsured because of the decisions of states not to expand Medicaid. 

And if you believe some earlier data from the Kaiser Family Foundation about the total number of people who will be left uninsured because of states' failures to expand Medicaid, then you can only conclude people with mental illnesses account for nearly 80 percent of all those who are being denied insurance coverage in non-expanding states.

This includes 652,000 in Texas and 535,000 in Florida, and around 200,000 each in Pennsylvania, Indiana, Georgia, North Carolina, South Carolina, Tennessee, and Louisiana.

The association characterizes this as “dashed hopes” and “broken promises.”

You might also call it a national disgrace.

For those of us who live in one of the non-expanding states, we’ve grown accustomed to disgrace.  Our states are often held up as examples of what not to do.  We have poorer health status, and usually spend less on mental health services.   We also have the life expectancies of Libyans.

Our policymakers often blame Washington for all of our troubles.  But Washington isn’t to blame for this one. Washington’s recent decisions on health policy did not contribute to our current staggering debt.  Fighting two interminable wars on a credit card at the same time our banking industry nearly collapsed took care of that. 

No, these decisions reflect a lack of understanding and empathy on the part of elected officials.   Their decisions have consequences, and cannot always be blamed on someone else.

Perhaps those who live in more progressive states are feeling a little superior right now.  But they should not be.  Legislators in those states also didn’t clamor to expand Medicaid for all these people with mental illness before the federal government stepped in and offered to pay for it. 

So we are really all in this together.

We are all pushing nearly 4 million people even farther out on the fringes of our health care delivery system. 

These are people living with at least one serious, often life-threatening, illness.  They are living near or below the poverty line.   They cannot afford to pay for health care.  And to top it off they are often subjected to stigma and discrimination. 

This is a group of people who are frequently homeless or incarcerated. 

And when they do need medical care, this is what we say to their providers.  Treat them for free.

We ask hospitals to care for them in their emergency rooms for free.  We ask community mental health centers to provide inpatient and outpatient services for nothing.  And we ask clinicians to donate their care.

The solution for this is simple and involves us all.  If we want to do so, we can bypass those non-expanding states entirely.

All we need to do is to ask Congress to amend the Affordable Care Act to allow people living below the poverty level the option of purchasing insurance on the exchanges at the same price as those living at the poverty level. 

Right now, they cannot.  The reason is that the price of insurance for someone living below the poverty level isn’t subsidized.  But it is for everyone between the poverty level and 400 percent of poverty – over $90,000 per year for a family of four. 

There are plenty of people who think we treat people below the poverty level like millionaires with our entitlement programs.  Ironically, in this one instance they happen to be right. 

If Congress were to make this change, the immediate result would be that 3.7 million people living with mental illness could get decent basic health insurance for little or no cost. 

Of course, it would cost the rest of us something.  But Medicaid expansion costs all of us something, too – even those of us living in non-expanding states. 

And the money would be put to good use. It would reimburse providers of necessary health care, stimulating the sector of the economy that accounts for one-sixth of our GDP (and a similar percentage of our jobs).

So everyone would win if we did this.

Who could object to that?

My guess?  Many of the same politicians who don’t favor Medicaid expansion.  Because when you get right down to it, where people with mental illness are concerned, some of these politicians may in fact be our biggest national disgrace.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

Income Inequality, the State of the Union, and the Affordable Care Act

The President focused on income inequality in his State of the Union speech.  This is an important issue; as the gap widens between those rich and poor.

But income inequality is built into our public policy at so many levels – and even at the lowest ends of the economic spectrum sometimes the “wealthier” individuals receive better benefits than those who may need them even more. 

A case in point is how the insurance subsidies work in the Affordable Care Act in the aftermath of the Supreme Court ruling of 2012.

In these, the poorest individuals and families – those living below poverty level – fare the worst.

This is an inequality that could be repaired easily and immediately.

Here’s how this particular inequality works.  If you are a single person earning $11,375 per year, you pay the highest percentage of your income for insurance as anyone in any income bracket. 

An example:  If you want to buy “silver plan” health insurance on the open market, it will cost you $2,535 per year – or almost one quarter of your annual income.  Or you can purchase a bronze plan for $2,101.  That is still over 18 percent of your income.

In other words, you can’t afford it.

But if you earn just $230 more per year, or $11,605, then the result is almost magical.  The cost of a silver plan goes down to $232 per year – just two percent of your income.  And if you opt for a bronze plan, it will cost you nothing.

It may seem hard to believe, but it’s true.

The reason is that the first person earns just below poverty level (99 percent of poverty) and the second just above (101 percent of poverty).  And insurance subsidies begin at 100 percent of poverty.

Congress was aware that it was building this severe inequity into the law in 2010, but it was not worried about it. 

That was because it also passed a fix.

It mandated the expansion of Medicaid in all fifty states to people earning 138 percent of poverty.  With Medicaid as an option, few people living near the poverty level would need or want private insurance through an exchange.

But then the Supreme Court created a new problem.  Without acknowledging the inequality in the subsidy, it ruled in 2012 that Medicaid expansion was optional, effectively undermining the fix.

In spite of the eighteen months of political chaos that has resulted from this ruling, many states – and we can now say a majority of them – have moved to remedy the inequality in the only way they can. 

They have chosen to expand Medicaid, taking up the federal government on its offer to pay nearly one hundred percent of the cost.  And over the next several years, most of the remaining states will probably follow, but only after they’ve wasted billions of dollars of their own resources during the delay.

But remedying the inequality isn’t the same as eliminating it.  In states like Connecticut, which have embraced expansion – it just covers it over.

And in states like Florida that have not embraced expansion, it still leaves millions of people out in the cold.

There is a solution for everyone, and the federal government could move forward on it – if it is as serious about reducing inequalities as the President is.

Right now, the federal government exempts people living below poverty in states that have not expanded Medicaid from the mandate that they buy insurance.

But there is a better alternative.  It could offer everyone living below poverty the option of “purchasing” a bronze plan at no cost.  In other words, it could extend the same subsidy to them (when they are not otherwise eligible for Medicaid) as is available to those earning just above poverty.  It would probably also have to waive the deductibles in those plans for this group, and there are ways it could do this.

This would cost the federal government no more than paying for Medicaid expansion.  It would get millions more people covered – many of them adults, and many with chronic conditions.  And it would spare us endless debates in reluctant states.

There are legislators in some of these states who have proposed using new federal Medicaid dollars to purchase private insurance for low-income individuals.  That’s an idea, but expanding subsidies would be a simpler solution.

It would cut out the reluctant state middle man, and reduce inequality directly.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

A Billion More Reasons to be Disappointed in this Congress

It was good news when Congress recently agreed on a budget for the first time in forever.  It was the product of compromise, and everyone expected to give at least a little. 

But when the details came out last week, it turned out that some had to give more than others.  And the ones who probably gave up the most were the people who have saved the greatest number of lives over the past century – the public health and prevention community.

Last week, the House introduced the FY2014 Omnibus Labor, Health, Human Services, and Education bill – one of twelve appropriations bills that will implement the FY2014 budget.  As the bill summary noted, the legislation includes $156.8 billion in discretionary federal spending for all these important areas combined. That is a big number, and comes to around $500 per person.  By comparison, Defense– which is often considered to be the other “big” area of discretionary spending – will get around $1500 per person.

But the disappointing number wasn’t the bottom line, which is $100 million below the FY2013 level.

It was that – to get to the bottom line – Congress has proposed to cut $1 billion from already-promised public health and prevention funding.

When the Affordable Care Act was passed in 2010, it had a price tag of around $1 trillion over ten years.  This wasn’t all new spending.  We were going to spend at least that much on health care programs whether the law passed or not.  What ACA did was to re-structure that spending.

Historically, public health and prevention have gotten about 3 percent of our health dollars.  And if ACA had continued to provide that share, then $30 billion would have been dedicated to public health and prevention.

But when the dust settled in 2010, the new Prevention Fund (which was once targeted for as much as $80 billion) was promised only $15 billion, or an average of $1.5 billion per year for ten years.  And even this more modest amount was described by Senator Tom Coburn (a physician) as “a slush fund” within two weeks of its passage. 

Congress has hacked away at this fund ever since.  Two years ago, it slashed $5 billion from it.  As I wrote at the time, this represented 6 percent of total public health spending in 2010, and would cost us over 13,000 lives.

This was beyond disappointing for anyone who cares as much about the health of the population as he or she does about health care.

But it did not stop Congress was disappointing us again this year.  Or from using some of the same hypocritical reasons for cutting prevention programs today as it has in the past.

The bill summary claims that the legislation “seeks to focus tax dollars on programs that are critical to the health and well-being of Americans, including disease prevention and research programs.”  But it appropriates a total of only $160 million of the bill’s $156.8 billion to the Prevention Block Grant.

That represents just one dollar for prevention block grants for every one thousand dollars of omnibus bill spending.

And just two sentences later, it announces that it will reduce “the Prevention and Public Health ‘slush’ Fund by $1 billion.”

The reason it gives for slashing the “slush fund” is “to prevent the Secretary of HHS from raiding these funds for Obamacare exchanges.”  That actually happened in 2013, as Sarah Kliff explained in a terrific Washington Post blog on the shrinking fund last April.

But Congress raided these same prevention funds in 2012 to pay for the so-called “Doc Fix” (i.e., to prevent a sudden 30 percent decrease in Medicare payments to physicians that was caused by an error in a reimbursement formula in place since 2002 that Congress has failed at least a dozen times to fix permanently).

Members of Congress, like everyone, expect to have water that is drinkable, food that is edible, air that is breathable, homes that are safe to live in, and outdoor spaces to relax and exercise in.  If they take care of themselves, they hope to avoid cancers, heart disease, and other chronic conditions.

They understand the connection between these things and public health and prevention funds.  They just choose to ignore it.

If you have been disappointed by this Congress in the past, you probably have your reasons. And if you care about prevention and public health, now you have a billion more.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

Five Fake "Facts" About Obamacare

Last week, I was talking with a new acquaintance about health and mental health policy.

He was a successful businessperson, smart, very well educated, and well-informed about public policy.  Like most of us, he follows the news about Obamacare closely.  And he has strong opinions about it. 

But I realized as we talked that there were things he thought he knew about Obamacare that were not actually true.  But we both had heard them many times before.

So here are five often-repeated “facts” about Obamacare that you, too, have probably heard, and happen to be wrong.

1.  The Affordable Care Act was supposed to reduce health care costs significantly. 

Untrue – when the Affordable Care Act was passed, the Congressional Budget Office projected that it would cost more than $1.2 trillion over ten years.  After the Supreme Court decision in 2012, CBO lowered its projection to under $1.2 trillion.  (When these numbers were updated in 2013, they did not change dramatically.)

The cost of doing nothing was greater – but not by much.  Repealing the Act would cost around $10 billion a year, or less than ten percent more.  So the Affordable Care Act “savings” were always pretty small.

But even those savings were optimistic.  They were based on an assumption that Medicare would cut doctors’ fees by 30 percent – something no one thought would happen.

So the truth is that while some healthcare system costs may be less under the Affordable Care Act, overall the law was intended to be cost neutral.

2.  The Affordable Care Act has failed because it has not lowered large employer-based group health insurance premiums this year.

Untrue – the Affordable Care Act was never intended to lower the sticker price of any insurance premium.  It was only intended to lower the net cost for individual and small group plans by giving tax credits to individuals who (1) earn between 100 percent and 400 percent of poverty and (2) buy their own insurance. 

What ACA did for everyone else was to make sure that they got more for their money by introducing a new set of consumer protections (including minimum loss ratios, coverage for pre-existing conditions, and no cancellations when people get sick) that were not previously guaranteed by federal law or all state regulators.

3.  Under the Affordable Care Act, many working middle-class individuals are still faced with unaffordable health insurance premiums.

My acquaintance talked about the huge burden faced by workers who are paid $35,000 per year – a decent wage, but not an easy one to live on.  He didn’t believe me when I told him that a family of three earning $35,000 could get a “silver” plan – probably comparable to what many large employers offer – for between $100 and $200 per month.

So here’s a link to prove it.  According to the Kaiser Family Foundation’s insurance subsidy calculator, a family of three earning $35,000 per year in my zip code will pay, on average, $156 per month (net) for a silver plan that costs $6641 on the open market.  And if they choose a bronze plan, it will cost them nothing. And in my county there are over one hundred approved plans from which to choose.

4.  The Affordable Care Act was supposed to prevent insurance companies from ever changing or dropping plans again.

Also untrue – but President Obama did famously declare that you could keep your plan if you liked it.  He apparently assumed that people understood that he was making two assumptions here – that the plan met the minimum standards set by the new law, and that the insurance company was still willing to offer it. 

And that leads to the fifth and final “fact” you’ve heard that isn’t true.

5. The Affordable Care Act is at least in part a government takeover of the health care financing and delivery system.

Untrue again – because if it had been, you probably would have been able to keep your existing plan, because the government could have forced your insurer to continue to offer it.

So what is the truth about the Affordable Care Act? 

It is simply this – Obamacare is a balanced approach to reducing the number of uninsured people through a combination of expanded public welfare programs, subsidies to lower and middle class individuals, and private insurance market regulatory reforms.

That’s all.  And that’s a fact.  And its success will be judged ultimately on how well it accomplishes this goal.

And if you want to know how that’s going, click herefor the January 2014 federal report or take a look at the chart accompanying this column.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

Mental Health Parity At Last

At long last, the Administration has released the final rule implementing the Mental Health Parity and Addiction Equity Act of 2008.

This will extend mental health insurance benefits on a par with medical/surgical benefits to at least 30 million more people. 

And, more importantly, we have finally ushered in a 21^stCentury response to a set of diseases for which we still often employ 19^thCentury treatments – locking the door and throwing away the key.

The Mental Health Parity Act (MHPA) was passed in 2008.  Its purpose was to end insurance discrimination against people with mental illness.  

For larger group health plans, it outlawed annual and lifetime limits on mental health or substance use disorder benefits when there are no annual or lifetime limits on medical/surgical benefits. And it required that co-insurance and co-payments be substantially the same for both mental health and regular medical/surgical procedures.

As it turned out, the MHPA needed the Affordable Care Act (ACA) for it to work most effectively.  And vice-versa.

ACA extended MHPA protections to the small group and individual markets, and made mental health and substance use disorder benefits “essential benefits” that all marketplace insurers (i.e., non-grandfathered plans) had to cover.

But ACA also relied on state benchmark plans to determine how the essential mental health benefits were defined.  This opened the door to the possibility that a state might use its own definition of parity – one less strict that the federal government’s – in defining those benefits, even though the MHPA set a standard federal approach.

For years, we have wondered how the final rule would reconcile the two laws.

Good news – the final rule makes the uniform, minimum parity standard come to life.

According to the final rule, states can require better parity coverage than is required by the federal law.   

But they cannot set minimum levels of coverage that are less than those demanded by the MHPA.  And if there is a dispute about this, the rule’s preamble clearly spells out how such a dispute should be resolved: “An insurer subject to MHPAEA may be required to provide mental health or substance use disorder benefits beyond the state law minimum in order to comply with MHPAEA.” (p. 46)

Still, there are limitations to the law and the rule.

For one thing, the MHPA does not by itself mandate that all insurance products include behavioral health coverage – we need ACA for this. As the rule notes, while treatment limitations are not permitted under the MHPA, “a permanent exclusion of all benefits for a particular condition or disorder… is not a treatment limitation for purposes of this definition.”  (Sec. 54-9812-1, p.103)  

Also, it does not establish uniform co-pays for providers.  The co-pay for a behavioral health provider’s service may still be different from, say, the co-pay for a primary care provider’s service.  Instead, the co-pays are calculated based on the co-pays set for all similar medical/surgical services covered in the plan.

And in high-deductible plans certain prevention services, such as screening, may be covered at no cost, while other mental health services may either have a cost or not be covered at all (see the preamble, p. 18-19).

Finally, the rule does not entirely resolve the question of provider rate-setting – a post-MHPA issue that arose in Florida when one insurer singled out mental health providers and reduced their rates in late 2011: “Plans and issuers may consider a wide array of factors in determining provider reimbursement rates for both medical/surgical services and mental health and substance use disorder services.… The NQTL provisions require that these or other factors be applied comparably to and no more stringently than those applied with respect to medical/surgical procedures…. The Departments may provide additional guidance if questions persist with respect to provider reimbursement rates.” (p. 24)

But all in all, this is a good rule.

It extends the parity provisions that have covered most of the 130 million people in large groups under the interim rule to an additional 30 million people (p. 64), and does so at an affordable price.

This expanded coverage will cost an estimated $10.55 per person initially, and up to $1.13 billion over five years (p. 78).  It will result in an insurance premium increase of less than 1 percent in both the individual and small group markets.

The new rule will cover all plans issued, or renewed, after July 1, 2014.  That will be a good day for fairness and equity.

Note:  I started writing Our Health Policy Matters exactly three years ago, in November, 2010.  Since then, I've published at least one new column per week, without a break.  So, for the first time, I'll be taking a couple of weeks off.  I will not publish next Wednesday or the week after, but will return with new columns after Thanksgiving.  If there is breaking news between now and then (and no, I don't consider the low Obamacare enrollment numbers to be newsworthy right now, but about what should have been expected based on the enrollment numbers for the now-put-to-bed PCIP program!), I may publish something off-schedule, and catch you up after vacation if you don't visit the site between now and then.  In the meantime, if you enjoy OHPM, I encourage you to take a look at some of the older columns you might not have had time to read in the past.  And feel free to contact me directly with ideas you may have for future columns! And thanks for reading - I've been averaging 13,000 readers per month lately.  Not huge by some Web standards, but not too bad either for a once-a-week health policy effort.  I thank you, and wish you a very Happy Thanksgiving!

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

President Kennedy's Unrealized Promise

Exactly a half century ago, in October, 1963, President John F. Kennedy signed the Community Mental Health Centers Act into law.  It affected two very different classes of people - people with mental illness and people with developmental disabilities.

In many ways, it was a civil rights act, promising to replace large, segregated institutions with integrated, community-based services.

It made a huge difference for people with developmental disabilities. 

But for people with mental illnesses, its promise is unfulfilled and the dream sometimes feels like it is dying.

When President Kennedy signed the Mental Retardation Facilities and Community Mental Health Centers Construction Acton October 31st, he did so with optimism. The law specified that the new community mental health centers would offer four services – prevention, diagnosis, treatment, and rehabilitation or recovery – to people with mental illness.  And the result would be that all people, no matter what their disability, would live freely and comfortably in their home communities.

Had he lived to today – into his late 90s – President Kennedy would be appalled at what became of this vision.

He would have witnessed in 1981 the replacement of direct federal funding for community mental health services with an inadequately-funded mental health block grant to the states.  And he would have seen the result.  Chronic homelessness grew, and jails and prisons became the new warehouses for adults with mental illness.  Here is a statistic that would have stunned President Kennedy – women in prison today are twice as likely to have serious mental illnesses as are men.

President Kennedy would also be dismayed that his vision for community-based special education for children with emotional disturbances became so clouded, and with such tragic consequences.  The Act provided for demonstration grants to improve special education services.  He never could have imagined that fifty years later, only 389,000 children would be receiving special education services because of emotional disturbances.  And if one in five school-aged childrenactually has a mental disorder, then this means that we are identifying only one in every 28 for special education services.

And, notwithstanding the promise of the Affordable Care Act, President Kennedy would also be far from satisfied with some recent federal foot-dragging.  In 2008, the Mental Health Parity and Addiction Equity Act passed with the help of his brother and nephew.  It guaranteed equitable insurance coverage for mental health and health conditions.  But it has taken five years for a final rule to implement that law (a rule now promised within days or weeks).  And at the same time funding for SAMHSA – through which federal block grant dollars flow – has declined.

He would have seen states do no better.

I was in the Connecticut State Legislature when we received our first block grants in the early 1980s.  There was zero interest in using state funds to continue building the community mental health center program. 

That was long ago.  So let’s look at today. 

In the five years between 2008 and 2013, states cut $4.6 billion from mental health services, often citing an unwillingness to burden state taxpayers with these services. 

But even when states were offered a free ride, many still refused to authorize additional spending on mental health services.  This year, twenty-two states refused to expand their Medicaid programs, even though the federal government agreed to pay 100 percent of the cost for three years and told states that they could contract the programs again as the federal share went down.  No surprise – many of the 5 million left behind will be people with mental illnesses.

If we wanted to realize the vision of President Kennedy, it would not be hard.

We could offer all children mental health screening as part of well-child exams, and admit more children with mental illnesses to special education services.

We could provide insurance coverage to more people with mental illness, and appropriate more funding to community mental health services. 

And we could opt not to send adults with mental illness to prison, at least until we have guaranteed them access to care and worked with them to develop a meaningful recovery plan that might help them avoid hospitalizations, homelessness, and imprisonment in the future.

If we did these five things, we could give vigor to the dream and honor the promise President Kennedy made when he signed the Community Mental Health Centers Act into law:

“It was said in an earlier age that the mind of a man is a far country which can neither be approached nor explored.  But today… it will be possible for a nation as rich in human and material resources as ours to make the remote regions of the mind accessible.  [People with mental illness]… need no longer be alien to our affections nor beyond the help of our communities.”   

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

Six More Reasons Why Obamacare Won't Be Repealed

The House of Representatives voted to repeal the Affordable Care Act for the 40^th time last week.  It did this before balancing the budget, passing a jobs bill, reforming election laws, or anything else that might actually improve its standing in the eyes of the general public.

So what began for some members of Congress as principled opposition to federal “overreach” has turned into a political punch line:

“How many more votes will it take for the House of Representatives to repeal Obamacare?  It doesn’t matter, because the House doesn’t count anyway.”

The very first column I wrote after the mid-term election in 2010 was entitled “Six Reasons Why Health Reform Won’t be Repealed.”  In it, I argued that there were at least five substantive reasons why the Affordable Care Act would not be repealed in spite of the Republican House takeover.  These included the popularity of the expanded Medicare benefits, the benefits to early retirees, the benefits to adult children, and the benefits to those with chronic conditions.

I concluded with a political reason.  People who were already upset at the high cost of health insurance would never vote for someone who would vote consciously to make that cost even higher.    

That is as true today as it was then.

So, almost three years later, here are six more reasons why Obamacare will remain the law of the land even after 2016, no matter how many more meaningless repeal votes the House takes between now and then, or how many Senators suggest shutting down the government to prevent its implementation.

First, states with expanded Medicaid programs will never support the repeal of that provision of Obamacare.

That means that neither will most of their members of Congress, no matter how they vote for show.  At present, those states have 205 representatives in the House.  By the end of the year, that number should be closer to 238.  In other words, by next year, states with expanded Medicaid programs will have a majority in the House of Representatives.

Second, the infrastructures to implement Obamacare in all fifty states are now being established – and one of these is an advocacy infrastructure.  Ironically, the advocacy infrastructures may become even more potent in states that have opposed Obamacare.  Because those state governments are giving them no help, they can marshal anti-government on behalf of Obamacare.  For example, the enrollment efforts of Florida CHAIN and its allies already show an impressive level of planning and sophistication.  And they will only get better in the days to come. 

It is difficult to repeal any governmental program.  It is even more difficult when there is an organized effort to protect it.

Third, the existing Medicare program for current and newly-enrolling Medicare beneficiaries is still untouchable for politicians.  

That includes the Obamacare changes that are now an integral part of Medicare – better prescription drug coverage and better wellness benefits.  Imagine being the politician who wants to take away those!

Fourth, unless and until the Congressional Budget Office changes the way it projects budget impacts, you can’t repeal Obamacare without adding to the deficit.  And, for the record, no one in office or running for office favors adding to the deficit.

Fifth, too many people – as many as 25-30 million, by most estimates – are going to benefit directly from the tax credits beginning next year.  If you repeal Obamacare and raise the annual cost of their health insurance by thousands of dollars, they will notice.  Suggesting that they can just become uninsured probably won’t cut it.  And they will probably vote against you in the next election.

And finally, the House lost the issue’s long-run political debate right after the 2012 election, when it replaced “repeal and replace” with simply “repeal.”

“Repeal” may be easier to argue in the short-term, but opponents have to have a plausible alternative to Obamacare to build their constituency.  And they don’t have one.

So whether or not Obamacare becomes more popular in the days to come, to most people it will be much better than nothing.

Even if the House casts forty more votes to repeal it, and even if more senators join the tin-eared chorus threatening to shut down the government over its implementation, Obamacare is here to stay. 

And all the members of Congress already know this.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

Obamacare Is Making Insurance Companies More Efficient

Obamacare may already be making private health insurers more efficient, according to a year-over-year comparison of data related to the biggest consumer protection in the law.

Last year, insurers had to rebate $1.1 billion to consumers because they failed to meet the minimum payout percentage required by the law.  That was the first year the payout provision, or mandatory minimum loss ratio, was in effect.

This year, the federal government has announced that the rebate will be just half that – slightly more than $504 million.

And the number of consumers who receive a rebate will also be smaller.  Last year, 12.7 million customers received rebates.  This year, the number receiving rebates has dropped by one-third, to 8.5 million.

Why are fewer and smaller rebates a good thing?

According to the Department of Health and Human Services, this is evidence that insurers are “spending more of their premium dollars directly toward patient care and quality, not red tape and bonuses.”

The loss ratio provision is sometimes described as the 80/20 rule.  It states that, for every health insurance plan it offers, a private insurer must pay out at least 80 cents of every premium dollar on patient benefits, reserving only 20 cents for administrative costs and profits.  (For some plans, the requirement is 85 cents.)  Whenever it does not, it has to rebate its customers the difference.

The provision does not affect Medicare, because Medicare has significantly lower administrative costs than private insurers, and regularly pays out around 95 cents in care for every dollar it takes in.

Those who receive rebates may be happy, but it is better not to receive one.  A rebate is a sign that your insurance company has not paid out enough in benefits to the people as a whole who are covered by your plan.  This can happen to any insurer – especially when its customers have a healthier year than expected.  But if you have received rebates for two years in a row, you might want to ask why, and consider whether another plan would be better for you.

HHS breaks the data down by state and by three categories.  This year there were six states in which every plan met the standard in the individual insurance category, fifteen states in which every plan met the standard in the small group category, and ten states in which every plan met the standard in the large group category.

In no state did every insurer meet the standard in all three categories, but there were six states in which insurers met the standard in at least two categories.  

In Vermont and Alabama, every small group and large group market insurer met the standard.  In South Dakota, Rhode Island, Maine, and Hawaii, every individual and small group market insurer met the standard.  Rhode Island probably edges out the other states as best overall – in the one category its insurers will pay some rebates, the average will be only $43 per policyholder.

For this year, every Connecticut insurer met the standard in the large group market, after at least some fell short in all three areas last year.  And there was a big drop in the average rebate in the individual market, from $124 to $64.  The small group market, though, saw an increase, from $162 to $357.

And even Floridians, with a weak state insurance regulator, have something to celebrate.  The size of the average rebates went down in all three categories, from $240 to $164 in the individual market, from $190 to $94 in the small group market, and from $94 to $51 in the large group market.

In general, the results for this year appear clearly more attributable to the work of the federal government than to the states. 

In fact, last year, there were 37 total times across all fifty states when all the insurers in a given category met the standard.  This year, that number went down to 31.

But the bottom line is unmistakable.  On the whole, insurers are paying attention to this consumer protection, and working to meet this new standard.  And this is something that would not be happening if it were not for Obamacare.

As HHS headlined in its release, consumers have saved a total of $3.4 billion upfront in their insurance premiums this year as a result of Obamacare, in addition to the $500 million in rebates.  This may not be all we wanted.  But it is a start.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/ 

Grim Numbers Result from Failure to Expand Medicaid

In the aftermath of the decisions by state governors and legislators not to expand Medicaid, the grim numbers are beginning to roll in.  Failure to expand Medicaid will cost states more than 19,000 lives and over a billion dollars per year.

And that, sadly, is only the beginning.

Source: RAND Analysis, Health Affairs, June 2013

I wrote about this prospect earlier this year, when I concluded that as many as 36,000 lives could hang in the balance of the Medicaid expansion debate.

Now we have some new numbers from a RAND Corporation analysis, published this month by Health Affairs, which quantified the impact of failing to expand Medicaid in fourteen states (as of April 2013) where governors opposed the expansion.  The fourteen states were Alabama, Georgia, Idaho, Iowa, Louisiana, Maine, Mississippi, North Carolina, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, and Wisconsin.

It found that in 2016 there would be 3.6 million fewer insured people in these states.  Collectively, the states would lose $8.4 billion annually in federal reimbursement.  And they would also need to spend an additional $1 billion annually on uncompensated care as a result of their short-sighted decision.

In addition – and most chillingly – there would be 19,000 additional deaths in those states each year.  This is two and a half times the number of total combined combat deaths by coalition troops since the beginning of the wars in Iraq and Afghanistan, and more than the total number of homicide deaths in the nation each year.

But these numbers are already out of date, overshadowed by legislative decisions of the last month.

After the analysis was completed, several more states have moved to reject expansion.  Florida adjourned its legislative session in early May without agreeing to the expansion.  Nebraska’s expansion bill died in mid-May.  As recently as two weeks ago, Michigan’s Republican governor was calling for federal help to try to convince legislators in that state to put Medicaid expansion back into the budget.  And both the Ohioand New Hampshire Senates rejected Medicaid expansion just last week.

These decisions will cost hundreds of millions more dollars, while adding millions to the number of uninsured.  Florida’s rejection alone will account for one million more uninsured people and cost state taxpayers at least $430 million.

Failure to expand Medicaid in these states and others will also add thousands more deaths to the tally.

The irony is that all of these states have strong pro-life constituencies.  But the moral imperative of protecting lives doesn’t always extend to those who are already among the living – especially when it is the Affordable Care Act that offers the protection.

The people who will die prematurely as a result of decisions not to expand Medicaid include children with special health care needs – think of children who await organ transplants as examples – and adults with chronic diseases.  These people survive under the most challenging of physical and mental conditions, and have done nothing to incur the wrath of political leaders. 

And yet there is an undercurrent of anger toward those who are acting to save these lives that is, frankly, chilling.

Here is what the Republican Party of Benton County, Arkansas, published in its April 2013 newsletter directed at Republican legislators who supported the Medicaid expansion in that state:

“The 2^nd Amendment means nothing unless those in power believe you would have no problem simply walking up and shooting them if they got too far out of line and stopped responding as representatives.  It seems that we are unable to muster that belief in any of our representatives on a state or federal level.

“But we have to have something, something costly, something that they will fear and that we will use if they step out of line.  If we can’t shoot them, we have to at least be firm in our threat to take immediate action against them politically, socially, or civically if they screw up on something this big.  Personally, I think a gun is quicker and more merciful, but hey, we can’t.”

So we should think about shooting Republicans who vote for Medicaid expansion? 

Could the opposition to Medicaid expansion be more absurd and less grounded in reality? 

I suppose it could, if it involves giving up billions in federal dollars, costing state taxpayers billions more, throwing millions onto hospitals’ charity care rolls, and costing thousands their lives.

Come hear Paul Gionfriddo speak about what comes next for the health and mental health of South Floridians now that the legislature failed to expand Medicaid.  Sponsored by the Mental Health Association of Palm Beach County, and open to the public.  On Thursday, June 20, at noon at 909 Fern Street, West Palm Beach.  To Register: http://www.mhapbc.org/index.cfm?fuseaction=events.details&content_id=132

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/ 

Without Obamacare, We Would Have Even More School Crossing Guards

Adrian Dantley was a six-time NBA all-star who averaged over 24 points per game during his 15-year career.  He was inducted into the Naismith Hall of Fame in 2008.  He made good money and reportedly invested it well.

Today Adrian Dantley is 58 years old.  Like most 58 year-olds, he wants health insurance.  But the NBA does not offer health insurance to its retirees. 

So Dantley recently took a job as a school crossing guard – for the health insurance.  The story is all over the sports pages this week.  I’m sure that it is drawing more than its fair share of giggles and head shakes.

But I’ve known a lot of school crossing guards in my life.  And many do it for exactly the same reason.

As a summary of news reports recently digested by Kaiser Health News shows, it isn’t always easy for a 50-something retiree to get health insurance.

In just a few months, the Affordable Care Act will change this – and not just for 50-somethings.

But despite all of the attention to ACA in the three years since it was enacted, most of us still don’t really understand how it will affect us personally.

In recent weeks, some analysts and insurers have said to be prepared for sticker shock as 15-20 million currently uninsured people gain private insurance, and up to 17 million more move onto government-sponsored programs. 

So when a typical, middle income family has to buy insurance in this post-ACA world, what will it cost and what will they find?

The gross cost will indeed be high, but the net cost much lower.

You can plug your own numbers into the Kaiser Family Foundation’s excellent subsidy calculator and see for yourself. 

But this example will give you an idea.  The full premium cost of health insurance for a middle-class family of four making $46,850 per year will be $14,245 – almost one-third of that family’s total income.  They will then get back a tax credit worth $11,294.  So their net health insurance cost will be $246 per month.

And their ACA tax credit will be so big that they will end up paying virtually nothing in net taxes to the federal government. 

Instead, their entire tax burden – something that has historically supported spending on defense, highways, energy development, environmental protection, public health, education, social services, veterans’ services, childhood nutrition, and more – will essentially be returned to them to pay for their health insurance.

This will be true for many.  According to recent data from the Congressional Budget Office, the average ACA tax credit in 2014 will be worth $5,510. 

But, remember, you only get the credit if you personally pay the bill.

Where will we find our insurance, and what will it look like?

We will find insurance through new exchanges that seem as shrouded in mystery as the creation of the universe.

But when the exchanges come into existence in six months, they won’t be quite so exotic. 

We will just find a number of standard insurance plans from a variety of well-know insurers that we or our employers will be able to buy through premium payments and tax credits.  Nearly all will cover a standard set of health and mental health benefits.

Some plans will cover additional services, and be given a higher rating, “gold” versus “silver,” for example.  And co-pays and deductibles won’t disappear.  Premiums for insurance plans with lower deductibles will be higher; those with higher deductibles will cost less.

Health care procedures will still be covered, providers will still be paid, and insurers will still occasionally deny reimbursements for reasons that we can’t fathom.

Who will be left out?

If nothing else changes, in another three years thirty million people will remain uninsured. 

• Six million people who, for the privilege of avoiding the health insurance system in its entirety, choose to pay up to 2.5 percent of their income as a tax penalty to help pay for uncompensated care.
• Up to 12 million people with serious mental illnesses or addiction disorders who are currently not receiving care (except when they are in jail).
• Twelve million more who fall through the cracks, or are uninsured for short periods of time.

But at least Andrian Dantley and 68,520 others will have a choice.  They won’t have to work as crossing guards anymore just for the insurance.

To reach Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

Three Magical Numbers for 2013

Will health and mental health spending be part of the next Grand Bargain, Mini-bargain, or No Bargain at all?2013 could be the ultimate transition year for health policy – a wait-and-see time before the big changes ACA brings in 2014.  Or it could be much more.

Forget this week's latest budget drama.  Three often little-noticed numbers over the next few months will tell us much more about how this health policy year will eventually unfold.

The first is the Medicare “cost rate” projection for the next 75 years.  It will arrive in April in the Annual Report of the Medicare Trust Fund trustees.  This projection will tell us how much we need to worry about the present and future cost of our favorite entitlement program.

The second – especially in the aftermath of Sandy Hook – is the number of cuts or additions states make to their mental health budgets.  We’ll know this by the late spring or early summer.  It will tell us just how much our legislators have been moved by recent news to improve mental health services around the country.

The third will come in July.  It is the health care inflation rate for the past year, which is typically published in July in Health Affairs.  This will tell us all we need to know about the cost of health care in general, and the Affordable Care Act in particular.

The overall health care inflation rate matters to everything and everyone. 

In both of the past two years, the health care inflation rate was below 4% - the first time this has happened in a generation. 

This went largely unnoticed, because insurance costs are just beginning to catch up. 

But in a $2.7 trillion health economy, every 1% reduction in inflation is worth about $27 billion. And with health inflation currently projected at 5.7% annually over the next decade, more low numbers could eventually mean a difference of about $50 billion in health care spending per year. 

Over ten years, that’s around $500 billion of avoided spending – half of the total cost of the Affordable Care Act.

The Medicare “cost rate” projection could have just as big an effect on the way we address the long-term cost of Medicare. 

The Medicare Trust Fund trustees quantified the Medicare crisis this way on page 32 of their 2012 report.  They wrote that the average “income rate” for Medicare would be 3.86% over the next 75 years, and the average “cost rate” would be 5.12%.  That leaves an average deficit of 1.35% annually – the amount by which we would have to raise Medicare taxes or reduce Medicare services to keep the program solvent.

But there are two factors that influence the cost rate – the increasing Medicare population and the increased cost of health care services.  We already have a pretty good idea about the projected Medicare population over the next 75 years.  What is less certain is how much health care will cost.

That’s where health care inflation comes in again.  If it goes down, then so will the projected Medicare cost rate.

Then the life of the trust fund will be extended beyond 2024, Medicare’s projected share of GDP will go down, and the feeling of crisis around the Medicare program may dissipate in the coming year.

Mental health spending levels will tell us even more than lagging public health expenditures about how serious we are about prevention.

This is because states have been cutting both public health and mental health budgets for the last few years.  States will have to revisit both of these decisions in the wake of Sandy Hook.  Public health cuts are predictors of crises to come.  But mental health cuts are predictors of crises of the day.

Mental health cuts have so squeezed providers that they can no longer meet the service needs of our population.  Court systems and prisons are absorbing the pressure, increasing costs to states.  And when state mental health cuts are aimed at children’s services, we all eventually pay the price. 

There will be plenty of opportunities for states to improve mental health services.  Periodic mental health screening for children and adults, improving special education services, and re-directing adult mental health spending from jails to community mental health centers are just a few examples. 

Even before Sandy Hook put a spotlight on the lack of mental health services, the tens of thousands veterans returning from the Middle East were becoming a growing constituency for increased mental health funding.

We often say that there can be no disagreement about supporting our troops or our children.  And - despite the recent compelling evidence that our elected officials are incapable of rational, timely compromise - we’ll have our chance to prove it yet again this year.

Let us hope we don’t come up short.

Questions?  Email gionfriddopaul@gmail.com.  Follow Paul Gionfriddo on Twitter @pgionfriddo.